MUMBAI: Malaysian palm oil futures surged on Wednesday on concerns over production due to dry weather in key producing countries and as a leading industry analyst forecast a rally in prices.
The palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was up 0.91 percent at 2,551 ringgit ($617.68) per tonne by midday.Global palm oil production is expected to decline by 200,000 tonnes in 2015/16 due to dry weather from the El Nino weather pattern, leading edible oil industry analyst Thomas Mielke said
Mielke said palm oil prices could trade in a range of 2,700 to 3,000 ringgit per tonne due to the production shortfall.
"Mielke's view on the production shortfall prompted some
buyers to take long positions after staying on sideline in last
few days," said a Kuala Lumpur-based trader.
Dry weather has been affecting palm oil production in top
producers Indonesia and Malaysia.
The upside in crude oil prices and a weak ringgit also
underpinned palm oil, said another dealer based in Kuala Lumpur.
The Malaysian currency lost 0.5 percent versus the
dollar, making the tropical oil, which is priced in the ringgit,
cheaper for holders of other currencies.
Traded volume stood at 8,441 lots of 25 tonnes each,
significantly below the roughly 13,500 lots usually traded by
Oil prices were only slightly higher on Wednesday as support
from falling U.S. production was countered by a strengthening
U.S. dollar and concerns over slowing demand.
Palm oil may break a resistance at 2,545 ringgit per tonne
and then rise to the next resistance at 2,555 ringgit, said Wang
Tao, Reuters market analyst for commodities and energy
In competing vegetable oil markets, the May soybean oil
contract on the Dalian Commodity Exchange fell 0.84
percent, while the Chicago soyoil contract nudged down
Palm, soy and crude oil prices at 0540 GMT
Contract Month Last Change Low High Volume
MY PALM OIL Mar-6 0 0 0 0 0
MY PALM OIL Apr-6 2538 21 2523 2538 181
MY PALM OIL May-6 2551 23 2531 2551 4943
CHINA PALM OLEIN May-6 5098 -28 5034 5114 596938
CHINA SOYOIL May-6 5686 -42 5646 5724 274268
CBOT SOY OIL May-6 31.11 3.4 30.97 31.13 1801
INDIA PALM OIL Mar-6 493.7 3.4 491.7 494 458
INDIA SOYOIL Mar-6 608.65 -0.85 608.2 610.8 3440
NYMEX CRUDE Apr-6 36.69 0.19 36.24 36.72 21408
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($1 = 4.1300 ringgit)